EU leaders demand new trade defenses to counter cheap Chinese imports

EU leaders met in Brussels this week to confront a record trade deficit with China that has reached €1 billion per day.

To protect local industries from a "China shock" of state-subsidized exports, the European Commission was tasked with developing a new diversification law to penalize unfair competition. While France is pushing for aggressive U.S.-style tariffs, Germany remains cautious due to fears that a full-scale trade war would invite devastating retaliation against European automakers. The bloc is specifically concerned that Chinese overcapacity in electric vehicles and green technology will lead to the permanent deindustrialization of Europe's manufacturing sectors.

Detailed proposals for these beefed-up trade weapons are expected to be finalized and presented by the Commission later this year.